Claiming Travel Expenses when managing your Investment property You can claim travel expenses as an income tax deduction if the purpose of the travel is for the following reasons: • Preparing the property for new tenants (except for the initial tenancy) • Inspecting the property during or at the end of the tenancy • Undertaking repairs, where those repairs are because of damage or wear and tearincurred while you rented the property out • Maintaining the property, such as cleaning and gardening, while it is rented or available for rent • Collecting rent • Visiting your agent to discuss your rental property. If you use your own car to travel to inspect or maintain your rental property or to collect rent, you can claim a travel expense deduction. You cannot claim motor vehicle expenses for travel that is incidental to the main purpose of the trip. For example, if you drive past the property to ‘keep an eye on things on your way to work. Where you stay overnight, you can claim meals and accommodation. Where your trip is mainly for private purpose (e.g. having a holiday) and inspecting the property is incidental to that main purpose, you cannot claim the costs of getting there or the return trip. You can only claim local expenses directly related to the property inspection such as taxi fares to the rental property and a proportion of accommodation expenses. • For your personal use of the property – if the travel is for private purposes only, no part of the expense is deductible • To carry out general maintenance of the property while it is not genuinely available for rent • To undertake repairs, where those repairs are not because of damage or wear and tear incurred while you rented out the property (e.g. initial repairs before you rent the property for the first time) You need to keep proper records in order to make a claim, regardless of whether you use a tax agent to prepare your tax return or you do it yourself. You must keep records of: • The rental income you receive and the deductible expenses you pay – keep those records for five years form 31st October or, if you lodge your tax return later, for five years from the date your tax return is lodged • Your ownership of the property and all the costs of purchasing/acquiring and selling/disposing of it – keep these records for five years from the date you sell/dispose of your rental property, it is always a good idea not to dispose of this information.
Posted on: Fri, 05 Jul 2013 06:17:30 +0000
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